The currencies maintained yesterday’s advances against the
yen after the Bank of Japan kept its asset-purchase program
unchanged. Gains by the so-called Aussie dollar were limited
after a report showed construction shrank by the most in a year,
adding to signs of economic weakness that may prompt the
Australian central bank reduce borrowing costs further.

“There’s a more positive sentiment overall after stocks
went higher” helping buoy the Australian dollar, said Lee Wai
Tuck, currency strategist at Forecast Pte in Singapore.

The Aussie climbed 0.2 percent to $1.0265 as of 4:22 p.m.
in Sydney, trimming its weekly decline to 1.1 percent. That’s
still the biggest slide since the five days ended Aug. 17. New
Zealand’s currency, nicknamed the kiwi, gained 0.3 percent to
82.46 U.S. cents, set for a 0.7 percent five-day loss. The
Aussie gained 0.1 percent to 80.45 yen and the kiwi rose 0.2
percent to 64.64 yen.

The MSCI Asia Pacific Index of stocks added 0.4 percent
following yesterday’s 0.8 percent advance in the MSCI World
Index.

BOJ Policy

Japan’s central bank said today that it would maintain the
size of its asset-purchase fund at 55 trillion yen ($702
billion) and keep its credit-lending program at 25 trillion yen.
Policy makers left the key overnight rate unchanged at zero to
0.1 percent at the meeting, which was attended by Economy
Minister Seiji Maehara, the first minister to do so for over
nine years. Maehara said he went to the BOJ to express his
concern about yen appreciation and prolonged deflation.

Demand for the Aussie was limited as swaps indicate a 88
percent chance the Reserve Bank of Australia will lower its key
interest rate by 25 basis points at its next meeting on Nov. 6,
according to data compiled by Bloomberg. Eighteen out of 24
economists surveyed by Bloomberg expect a quarter percentage
point cut at next month’s meeting, while the remaining six
expect no change.

Citigroup Inc. cut its forecast for the RBA’s cash-rate
target and now expects it to be 2.75 percent in the first
quarter of 2013. The company previously estimated the rate would
stay unchanged at 3.25 percent.

Slowdown Signs

The Australian Industry Group and the Housing Industry
Association said today their construction performance index fell
to 30.9 last month from 32.2 in August. A reading below 50
represents a contraction.

The report followed figures yesterday that showed retail
sales grew more slowly than economists estimated. Other releases
in the past month have revealed the widest trade deficit in four
years and a drop in business confidence. The RBA lowered its
benchmark rate to 3.25 percent on Oct. 2.

“The Australian dollar should weaken in the weeks ahead,”
said Andrew Salter, a strategist in Sydney at Australia & New
Zealand Banking Group Ltd. “That’s reflecting the domestic
fundamentals in Australia. We expect another rate cut in
November.”